Indian Oil Corporation Ltd
NSE:IOC
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
103.45
192.4
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Indian Oil Corporation Ltd
You don't have any saved screeners yet
Good afternoon, ladies and gentlemen, on behalf of Batlivala & Karani, it gives us great pleasure to host the management of Indian Oil corporation for this 1Q FY '21 post result conference call. Without much ado, I would now like to hand over the proceedings to the management of the Company for the initial remarks, after which we open the floor to your Q&A session. Over to you, sir.
Thank you, Mr. Bhavin. We welcome you to quarterly earnings call. From management side, we have Mr. Sandeep Kumar Gupta, Director of Finance, Indian Oil; Mr. Matthew Thomas, Executive Director, Corporate Finance and Treasury. Along with them, we have Mr. Prabhat Himatsingka, DGM Treasury, and myself, Avinash Singhal, Management Treasury. To begin with, Director Finance will briefly touch upon the performance highlights for the quarter gone by. Thereafter, we will take questions from you slides. I would now request Director of Finance to address the meeting.
Dear investors and analysts, a very good afternoon to all of you. At the outset, I pray that all of you are safe and remain safe and sound. I take this opportunity to welcome all of you to this conference call post announcement of the first quarterly results for 2021. I believe you would have gone through the accounts posted on the website and also through the updates sent to you. I would still like to briefly dwell on the results to provide additional clarity and insights. Highlights first. First before going to the numbers, I would like to touch upon the impact of COVID-19 on business operations of the company during June and July 2020, particularly. Refineries ran closer to full capacity in the month of June '20 and the capacity utilization was at about 97%. In the month of July '20, the average utilization, though, fell to about 90%. Because of the lower demands primarily. For gasoline, in June, the demand was at about 85% of last year's volume. It has further improved to about 89% of the last year's volume in the month of July. The preference for personal mobility seems to be helping in sustaining the demand for gasoline despite reimposition of lockdowns in certain parts of the country. On the gas oil front, sales stood at about 82% of the last year's sales in the month of July and have dropped to about 77% of the previous year sales in the month of July. The slowdown in gas oil demand is primarily driven by the monsoons in addition to the lockdowns in some parts of the country during July. ATF continues to take the hardest hit with sales being only 35% in June, and it continued to be on similar levels in July. With the gradual lifting in lockdown restriction, several downstream industries in the petrochemical sector have resumed operations from late April '20. Indian Oil's naphtha cracker at Panipat operated at full capacity during June and July, along with downstream units for production of polypropylene, HCP, LLDPE and MEG. The LAB unit at [ Gujarat ] Refinery continued to operate at full capacity. The polypropylene plant in Paradip Refinery are operated at about 50% in the month of July. Now let me briefly touch upon the performance of major verticals during Q1, first refineries. The throughput during the quarter was at 12.93 million metric tonnes with a capacity utilization of 74.4%. The throughputs were severely impacted in April and May due to lower demand for finished products. During Q1, distillate yield was 78.3% and [ current ] loss was 10.9% much lower throughput than the design capacity in the months of April and May has led to deterioration in the above performance parameters in comparison to previous quarters. IOCL refineries have registered a negative GRM of $1.98 per barrel during the first quarter. Though the normalized GRM after shipping off inventory impact and prefactoring in price lags for the quarter is positive $4.27 per barrel. Avinash benchmarked in upper GRMs of negative $0.94 per barrel during Q1. In refineries, there is an inventory loss of INR 4,588 crore also. Coming to pipelines, the capacity utilization of our pipelines was about 63.53% during this quarter as compared to 88% in the Q4 of financial year '19/'20. Impact of COVID-related disruptions on demand resulted in lower utilization of both crude as well as product pipelines during the quarter. Our pipelines continued to generate stable returns, giving an EBITDA of about INR 11,000 -- 11 -- INR 1,150 crore during this quarter, which is lower than the preceding quarter due to lower throughputs. Coming to marketing. The petroleum product sales during this quarter was 15.48 million metric tonnes as compared to 20.64 million metric tonnes in the preceding quarter. Major products like gasoline and gas oil recorded a negative growth rate of about 35% each. ATF volume, the growth was closer to 18%. The bulk of the hit on demand was there in the months of April and May. Marketing division recorded an EBITDA of about INR 7,700 crore during April to June '20. This includes an inventory gain of INR 1,392 crore. Excluding inventory gains, the marketing EBITDA stood at about INR 6,300 crore. In petrochemicals, during the quarter, we reported an EBITDA of INR 728 crore as against INR 475 crore in the previous quarter. The EBITDA for corresponding period of last year, that is Q1 financial year '19/'20 was INR 686 crore. Improvement in polymer MEG as well as PTA spreads during the quarter helped the [ coming ] negative impact of lower sales volume during the quarter. On borrowings front, the borrowings as on 30th of June '20 were at INR 98,605 crore as against INR 1,16,545 crore as on 31st of March '20. The above includes lease obligation of INR 7,749 crore as of June 30 '20, which has been classified as borrowings. I will end my briefing here. We will now take your questions. Thank you very much.
[Operator Instructions] First question comes from Aishwarya Agarwal from Nippon India.
Just help us about this refining inventory method if you have. So I remember last quarter, we have some $37 or $36 kind of valuation for inventory. And I was expecting some meaningful inventory gain because the crude is at $43, whereas the result was otherwise. So [indiscernible]
The accounting guidelines, as you would know, does not allow us to book the gains which are there because of the uptick in the price limit. We had procured other inventories, crude oil, raw materials at a lower [ level ] than the March 31 valuation price also during the month of April. And that is what is getting reflected in the inventory losses during the quarter. As you would know, unlike other [ posted list of ] refineries, IOC has most of it's refineries inland in the in safe locations and it takes long time to bring that crude oil from the resource country to the refineries for processing and then, say, sending back to the marketing locations for sales. So now while this all resulted into inventory loss in this period. We have now crude bought at much cheaper prices subsequently in April and May. And going forward, we can [ hop ] off some inventories.
So what valuations are there for the current quarter when it comes to crude?
The crude is valued at $32.64 per barrel as of 30th of June.
And will I be right to assume that the current [ price layers ] are between, say, $42 to $44? So if prices holds on, then we'll be valuing it at these prices? Say $40 around?
Yes, crude, whatever we are having at about, say, $30 to $33 at the end of June will be get converted into the products, and the products will be sold at their prevailing prices. So if these prices remain high, we will have -- if these prices again crash, we may have losses.
That's very helpful, sir. And then 1 last question if coming to the -- if I look at the EBITDA number, and if I look at the way the CapEx are happening by us 2, 3 years, just ranging between, say, INR 25,000 to INR 30,000 crores. I don't see the commensurate increase in EBITDA happening though the refining is [ beat ] I agree. But the entire -- everything is going to refining or what? I mean, whatever CapEx is in does, there is no benefits coming in that EBITDA number.
No large amounts of the CapEx, which was done in the last 3 years was also because of the BS-VI projects, which were on the survival of the refineries actually because of the change in the specification of the country. Now the EBITDA has been low in the last year and it continues to be low in this year. While last year, it was because of the lower gasoline cracks primarily. In this year, COVID has flat down on the EBITDA. So definitely, I agree with you that the investments have happened in refinery. It has not been given the commensurate results. But it was because of extraneous reasons and is definitely not driven by the performance.
Even for 7th year also, sir, we have some INR 26,000, INR 27,000 crores of CapEx. And again, I don't know how much will get reflected in EBITDA. You are doing so much. You are putting so much of money into the CapEx, but how is it -- will it get affected or whether it will get reflected or not, [ is what I mean ]?
Definitely, it will be reflected. You know any company and definitely of IOC's size definitely approves the project only on merit and built on the economic returns, which are expected out of such projects. If there are no extraneous reasons, these projects will definitely bring returns more -- while some of the projects may be different to link, many of them are linked to the pipelines and marketing installations. And LPG, filling plants and other things. And definitely, these go on to reduce my logistic costs and other operating costs.
Next question comes from Nitin Tiwari from Antique Stockbroking.
Sir, my question is again on inventory loss itself to start with. Like you stated on that topic, you just mentioned that if prices go up, you can't book an inventory gain. So if you can just help us elaborate, help us understand that and elaborate a little bit more on that because I believe when we spoke in March quarter, you did mention something around net realizable value where we consider the value of products for valuing the inventory. So if we can just understand this process of inventory calculation for one? And secondly, again, like it's related to inventory itself, so what is the number of days of inventory that we carry on road side and on the marketing side, if you can just also -- then I'll ask 2 more questions once you answer.
The valuation of inventory is just based on the accounting norms of cost or net realizable value, whichever is lower. So that is the principle which everybody follows for valuation of inventory. In a period, the inventory losses would happen if there is a drop in the prices. And inventory gains will happen, if there is enough increase in the price levels. Now as I mentioned earlier, in the earlier -- to the earlier question, we had certain inventories as of 31st of March. Subsequently, the prices have dropped further and while we procured our raw materials at lower prices, the sales realization was also at correspondingly lower prices. And a part of that, whatever was accountable was accounted on 31st of March and balance got accounted in this quarter. Now going ahead, there is a rise in the prices subsequently as against the lower priced crude, which is available now at, say, about $32 or $33 per barrel. And if it is sold corresponding to the present crude cost, then we are set to recover certain inventory gains in the coming quarters.
Great, sir. But in March quarter, we did mention that the calculation was based on net realizable value as of 15th of April. Correct me if I'm wrong over this because I believe it was also mentioned that had we stuck to the values of 31st of March, the inventory losses would have been higher. So we had moved to basically calculation of -- on the basis of net realizable value and spared [indiscernible] . So is this calculation based on 15th of July or as of 31st of June? And it's based on crude price or like value of products as such like inventory -- I mean, refinery grade products?
The valuation of inventory, save for crude products, in any case, it has to be benchmarked to the product realization only. But for crude oil also, we have to see what is our cost of crude oil on a particular date and have to compare it with the realizable value of the products, which it will produce out of that, which we will produce out of that raw material. So accordingly, valuation was done based on best estimate, what was available until we closed our accounts for 31st of March. And whatever subsequently on 30th of June, whatever what balance was there, the balance that was there, that is reflected in the inventory losses for this quarter.
Sir, and the number of inventory days that you are carrying for crude and for marketing?
While for this period, it may be a little skewed because the sales are down. We generally used to carry about 45, 46 days of crude inventory and it is a little higher at this point in time, not in terms of the absolute number, but in terms of the number of sales.
Right. And marketing? How many days' product inventory?
Product inventory, again, we used to maintain about 15 days in stock for products. But corresponding to the current level of sales, the naturally, number of days' sales, it is appearing at a higher level.
Great. Sir, second question is related to CapEx. Again, as you mentioned that, that now some amount of CapEx is going into marketing infra and pipeline. So one, if we can have a breakup of CapEx numbers? And secondly, as you know, we have basically put up number of fuel stations. So at some level, are we looking at visionalization of this network infrastructure in a way that it is more efficient rather than going ahead and put -- adding basically outlets to our network. So what's the thought process here? Are we going to continue adding outlets? Or are we going to take up all this like right now? That would be [ nice ].
So first, CapEx. Mr. Matthew, if you can go ahead.
You wanted to know the CapEx numbers of this year?
Yes. And the [indiscernible]
We are planning to -- I mean, our plans today, as on today is we will be spending close to INR 26,000 crores during the year, which comprised around INR 4,000 crores for refineries, an equal amount between pipelines and around INR 5,000 crores for the marketing. And petrochemical will be close to INR 2,200 crores. And there will be some for our R&D and for investments in JVs and so on and so forth. So I mean, most of the expenses in refineries would be related to the BS-VI, which -- I mean, the spillover of the BS-VI expenses, which will happen this year. And in pipelines, of course, we have got the to be [ Ennore, Madurai, to go in ] our LNG pipeline. And the Paradip, Hyderabad pipeline is on. And it also got -- in marketing, we've got new the cylinders and pressure regulators. There'll be modernization of retail outlets also. And at the same time, we have construction of retail outlets, too. And there will be some terminals and depots coming with construction as well as revamp. And not to talk about the bottling plants. Again, they will be having some construction and revamp. So -- and an LPG input facility and Paradip and at Kochi. So these are comprising for marketing. And petchem, of course, the MEG project in the Paradip and there will be some expenditure over there. We'll have a bit of expenditure and other expansions in Panipat. So these are mainly the broad classification of CapEx throughout the year. And we have also earmarked some for possible assets. Of course, 26,000 contains something for possible assets. And all of it are all possible. If we find some good assets, then only we'll invest that, others we won't. Otherwise, we want to invest. So that's having our strategy all through, and we'll continue to do that steadily. So as on date, I may repeat my words as on date, the plans stands as of date. As we move forward and as the events unfold dates can be different, ground realities can be different. But as on this day, this is what we are watching as with respect to CapEx. Now coming with -- across to the retail on CapEx.
On CapEx, also. I want to further add. Out of this INR 26,000 crores of CapEx about INR 5,000 crores is in respect of our group companies, in which also, again, about, say, INR 1,100 is in respect of MRPL, which I do not know what will be the progress because it depends upon the lag issue being solved. And some portions, say, about INR 800 crores is on HURL and other things. But and I can give breakup, which Mr. Matthew has given, you can see that in refineries, there is an investment of only about INR 4,200 crore. And greater investments are there in pipelines and marketing and petchem, which we feel that petchem definitely is a profitable segment. And refineries and by pipeline, sorry, pipelines and marketing investments are towards reduction of my logistics and operating costs. So we believe that the benefits will flow out of these CapEx. And your next question was on the ROs. So while we have an ambitious plan of RO network expansion, but not necessarily all ROs will come in the A side category. And there are many ROs, which will come in the B side category, where the investment by the company is very minimal. So that is a factor of our marketing strategy, and I will not be able to divulge anything further on this at this point in time.
Next question comes from Ravi Agarwal from UTI.
Sir, my question is, again, around the valuation gains and losses. So basically, if I'm not wrong, sir, if I can just get to know what was the valuation, which was done on 31st of March on the inventory? And what was the valuation for 31st of July for valuing the closing stock?
As I mentioned, the valuation is done based upon the principle of cost or net realizable value, whichever is lower. So we continue to value our inventories consistently on this practice. As earlier said, while the valuation of, say, raw material inventory was at about $36, $37 per barrel as on 31st of March, it is at about $32 to $33 per barrel as on 30th of June.
So basically, if I -- if my calculation was correct. So $3 is what this closing inventory? And as you said, that your cost of procurement in April and May or maybe just April was very low, maybe around $30, $32, which you said. So -- and that was valued at around the same level. So basically, is that the reason? I mean, the opening stock was around 33% and the closing valuation was around at $30, something like that. Is this the exact calculation?
No. I can't get your question very clearly. It was a small question.
Yes, I repeat. So if you have valued the inventory at $32 to $33 a barrel for 31st of July. This has resulted in an inventory loss. So basically, what was the -- so wasn't the price around the $32 to $33 the entire quarter? I mean I'm just trying to get the reason for the inventory loss of around?
I mentioned that it was at $36, $37 as of 31st of March. And is at $30 to $33 per barrel as of 30th of June, not 31st of July, 30th of June, and this reduction in the value of inventory is because we value at cost or net realizable value, whichever is lower. So even if the net realizable value is higher, if we have an -- if we are carrying inventory at a lower value, we will have to value that inventory at a lower level. And this reduction during a period is termed as inventory loss. While we are holding a set amount of sales about 15 million to 17 million tonne of hydrocarbon inventory, we keep at any given point in time. If the value of that inventory in the international market goes down. So that will get reflected in May inventory losses.
All right. And can we expect a further increase in the core GRM because of the lower procurement price of the crude during the entire quarter?
So I would say it is not -- core GRMs will not go up. But yes, we will get -- we are set to gain some as inventory gains because we would be selling our products at a higher price as compared to the price of crude at which it was bought. So we will -- we are set to register certain inventory gains going ahead. While the core GRMs, we are going to remain sort of subdued, which are limited to the cracks which are there in the international market.
Next question comes from Chinmay [ Gandhi ] from Bharti AXA.
Yes. Sir, I have a question. Can you give some light on how the margins have been trending in products in marketing apart from diesel and petrol, especially LPG, exports. So how those have been trending like sequentially on or other trend?
I'll not be able to give this information product wise. We have already given you the marketing segment information.
Sir, [indiscernible] diesel, petrol -- normally, what is the trend in the product volume?
Are you wanting to knowledge...
He is asking how [indiscernible]
Can you repeat your question, please?
My question is ex diesel and petrol, the marketing margins on them [ remain down ] to us. As a trend, are they pretty much stable or they are -- how is the trend [indiscernible]?
They are stable. So as far as marketing is concerned, the marketing margin, product-wise, product to product also are going on as per the regular philosophy. So they are.
So even in like COVID, I mean when lockdown was there -- and there were be difficult [indiscernible]. The margin impact in these products was not very high.
I'm saying per unit of the product sales, they are stable. COVID has impacted the sales per se.
Yes, [indiscernible] okay. Okay. And just regarding the item discussed around COVID [indiscernible]. Regarding the inventory loss, which we meant basically [indiscernible]. So basically, your cost of crude average for the quarter was around 31, 33. So basically, that said inventory loss has come up. And what you are saying is like now the remaining inventory is around 32 to 33, and we are at 40-plus now. I think that stay over the period then you will have again because your cost is at 30% to 33% and been your crude of 40 per?
Yes, I believe you have understood correctly.
Yes. And normally, [Technical Difficulty] 45 days of inventory, which is so say, doing sorting because the volumes are a bit lower. So just 45 days, could be extended to what how much like you have been a will cover for like 2 months?
You can -- you can calculate this figure in fact. And we say that this absolute.
Based on 15 million to 17 million?
Yes. Yes.
Yes. Okay. Yes. So basically, we are kind of covered for the quarter more or less?
Not for the full quarter, not for the full quarter. Giving the inventory in terms of number of days sales is very tricky in these times, actually. We do not know how the thing unfolds going forward.
[Operator Instructions] The next question comes from Sumit Arora from [ Smart Sand ] Capital.
Sir, I want to understand how many fuel outlets do we have currently? And how many outlets are we looking to add in this financial year? The reason I ask you, sir, is because there was the international deals which happened yesterday, wherein Marathon Petroleum sold its Speedway fuel outlets 3,900 outlets for $21 billion. I am very, very confident that marketing is a very precious business, which is not been recognized by markets today, but it will be going ahead. So sir, can you just throw some light on basically our fuel outlets today? And how do you think this is going to be in the next couple of years?
Currently, it is about a little more than 29,000 retail outlets. And this will be involved in various categories of retail outlets, like this would be city outlets, highway outlets, rural outlet, and going by the past, and I think we would be adding more than 1,000 retail outlet per year, but that would also depend on the various strategies in place.
So I think going into the -- I mean, we giving you the numbers may not be appropriate right now. The concept that was mentioning was that we would certainly like to strengthen our marketing arm because they are giving steady returns to us. Nonlisted it on the competition point of view also. So certainly, we'll be strengthening those segments that we have earmarked, I mean money for investments in those sectors made the modernization of retail outlets or increasing the number of recedes. Both will be done throughout the year. And they are some of the strategies that we follow, and we continue to do so.
Next question comes from Amit Rustagi from UBS.
Sir, first, my question is, we have been saying that when Paradip Refinery gets over, our CapEx will decline. But still, we are consistently maintaining like INR 25,000 crores, INR 36,000 crores of CapEx every year. So don't you think that we need to take a pause here and rethink about our strategy? And maybe refurbish our thought process on the projects, which we should take and maybe sharpen the skin share? Because we have not been able to add any value by completing these projects.
Look, as I replied to an earlier question, our CapEx is evenly spread in various segments. So there is some CapEx in refineries, some in pipelines, some in marketing, some in gas, some in petrochemicals, some in our [geographical] companies. So we are not having a overhang in any particular segment. It is evenly spread. And these all investments are approved based on their own merits with due diligence, if they are expected to generate a particular kind of a return. So we believe that whatever projects are ongoing must continue. We have reviewed that also. And there, those projects must continue because those projects, say, as far as pipelines are concerned, they will go to reduce my logistics cost. Without any, say, impact on my end sale price. So similarly, if we are putting up some terminals or other plants, LPG plant sector, that is also for the purpose of reduction of logistics costs as well as the operating cost. So there is a value in all these investments, and we are expected to get benefit out of these investments. You have been taking -- taking the name of Paradip Refinery time and again, actually up, but definitely, a project of this size does take some time to actually give adequate returns. And we have very ambitious expectations from the Paradip Refinery project roles.
So don't you think that in the given environment, where the challenges and uncertainty prevails, we should take a pause on the CapEx plans going ahead? Or you think that we'll keep on investing the way we have been investing in all the projects everywhere have the segment?
As I mentioned you, while our CapEx for in the earlier years on the refinery segment, as for BS-VI after, it was primarily for BS-VI investments, which were, in fact, the survival portion of survival, the change in the specification of the oil. Now going forward, we have, say, a few expansions only, like we have Barauni refinery expansion cleared, no other expansion has yet been approved. So that expansion is also to take care of the future demand. Now this project was announced when COVID was not there. Okay. After COVID has impacted the demand globally ahead or the country also. We have been very carefully examining whether we should go up with further capacity expansions or not. As far as our other CapEx is concerned, it is in this, say, field of, say, pipelines or marketing or gas or petrochemicals. Now if we do not do these investments, then we lose on the potential of margins from gas business or petrochemical business, which are definitely high-margin businesses and futuristic businesses. We do not invest in pipelines. We lose on logistics costs. If we do not put up investments in marketing terminals and bottling plants, et cetera, we lose all the potential volumes also, LPG consumption, you can see that despite COVID, LPG consumption went up. So we are -- we feel that whatever investment plans we have as on the date, they are all justified, and they are not risky. And we must carry on these CapEx programs. Definitely, your concern is our concern also. We are being very, very careful in embarking upon any future project. We have recently announced PX/PTA project at Paradip Refinery, but that again is a petrochemical project, which we feel is -- would be profitable. And we have also announced Northeast Gas grid, which is our futuristic gas project. So we are also being very careful in investing any major amount or a sector where the demand may get impacted in futures.
And sir, my second question relates to the opening of CGD by the regulator PNGRB. So currently, we are selling gas through our fuel stations. But they are branded like IGL stations and Mahanagar Gas stations. So do you think to enter this market when the regulator brings open access in the existing CGD? Do you have any plan for this business as well?
It will not be appropriate for me to disclose the plans because this is a recorded call, but definitely, we will have certain strategy in these fields, though the guidelines are yet to be notified.
Sir, your guidelines are yet to be notified, but do we have any plans for the gas business per se, for IOC from like maybe 5 to 7 years perspective?
You know we have very aggressively bid in the CGD projects. We have 17 of our own, 23 in joint ventures. We have 40 years with gas. Going forward also. So gas, we have definitely chosen as a future business segment where we want to expand.
[Operator Instructions] Next question comes from Sabri Hazarika from Emkay Global.
I like go back to the inventory question once again. So I just have a clarification, your sister company, Chennai Petroleum reported around $12 of GRM and then you reported minus $2 GRM. So the difference was mostly because of this inventory gain, which you have reported was a loss. So was the difference only because of the fact that Chennai Petroleum is a coastal refinery and you are mostly inland? That is the only reason why the difference is there between the way they are reporting it and you are reporting?
Yes, I believe so. And that is what I mentioned in my opening remarks also, perhaps to the -- in the -- to the answer of 1 of the earlier questions. That the coastal refineries could clock the inventory gain very fast. IOC being located -- IOCL refineries located in the [ inter land ], would take some time to book the gains, and you can expect that in the coming months.
All right. So it will be probably at 2, 3 months left, so if we come in to.
Yes.
Okay. Okay. And second -- want to ask you a bookkeeping question. The first 1 is, you mentioned that -- I just wanted to ask you how much was the pipeline CapEx for -- for FY '21, around INR 1,800 crore, sir?
It is about INR 5,000-plus crores. INR 5,000 crores.
And how many retail outlet additional do you have?
Yes. In the pipeline, INR 4,571 crore of CapEx in the current year, which also includes the gas LNG pipeline of Ennore put together.
INR 4,571 crore.
Yes.
And how many retail outlets you are planning to add every year? I missed it. Is it around 1,000?
As Mr. Avinash mentioned earlier, we have clients of putting up. Every year, we have been putting up about 12,000 outlets and that program continues.
And how many of the total out of 29,000 outlets? How much is outlet in your [indiscernible]?
We do not have a figure right now.
Any ballpark number around 5%, 10%, something of that, sir?
Our team will give you a subsequently.
Okay. And sir, just 1 last question is the debt. You had mentioned that around INR 7,700 crore was the lease liability. Is that right, sir?
Yes.
And what about government subsidy outstanding, any breakup on the debt? And do you expect it to fall further from this INR 98,500 crore going forward?
This amount includes a government outstanding of INR 11,080 crore as of 30th of June, which has now dropped to INR 9,100 crore as on date. And 3 months now that the LPG and subsidies are practically not there at the current price levels, international price levels. We are expected to liquidate it this, particularly the outstanding every month going ahead.
Sir, $350, $360 per metric tonne, you don't expect any LPG DBTL subsidiary?
At this price level. There is no subsidy involved. So if this price level continues, there will -- there is not going to be any subsidy involved. So our will only reduce.
Right. So we should be around INR 90,000 crore, if you are able to like generate enough cash to meet the CapEx for this year, right?
I couldn't get you.
I mean we should be calling back to around INR 90,000 crore kind of drop, unless, of course, our free cash flow something negative develops a delay in earnings recovery?
Yes. I think you can expect so.
Next question comes from Mayank Maheshwari from Morgan Stanley.
I have 2 questions. First was regarding -- I think you had taken some new initiatives on the new energy side, specifically coming in on the battery swapping as such. Can you just kind of highlight your long-term plans on the CapEx you're kind of thinking about on that front?
We want to be present in every segment of EV short of vehicle per se and we have plans for the technology. So we are working on various kinds of chemistries for battery technology. We have international collaboration also on that. And our R&D is also working on that. Then we have plans for battery swapping. We have planned -- we already are putting up EV stations, EV charging stations. We have also plans of manufacturing the battery domestically using 1 of the accepted technologies. So we are very ambitious plan on -- for this segment.
So sir, how much would you be kind of spending in terms of CapEx around this for this year, even going forward? Is there something you can give us, some idea about of what is the investment you're planning on this?
So while the present investment may not be very significant in this particular segment for the current year. In future, we will have to plan out our strategy depending upon how the things take progress because the chemistry also -- an acceptable chemistry of battery should also be decided upon. And based on that, we will have the plant in the future years.
Okay. Okay. So this year itself, like if you kind of think about second half of this year, is there any plan like how many stations or how many retail outlets would you be offering this either EV charging or battery? Is there something that you have in your mind?
We will provide you this information subsequently.
Okay. Sir, the second question was more related to the PX/PTA plan that you were talking about earlier. You're spending about $2 billion on this. And I think there is massive oversupply on the PX side and at least globally, for the next multiple years. So can you just help us kind of understand what has gone into the investment decision to kind of go ahead with this PX/PTA? And if not, any other chemical?
So while there may be a global oversupply as of now. But going forward, we have anticipated that there will be a demand, at least domestically, and while as on date, there is no antidumping duty because it was revoked. But we are also confident that not -- no dumping perhaps would be able to take place. So we feel that this project is going to give us -- have some returns.
Okay. Okay. And any specific reason to just go ahead with this part of the value chain in petrochemicals, not any other part?
So we are also going on other parts like for Gujarat earlier, we went for also. So it is not that we are only looking at 1 of a particular product for our projects. So we are sort of diversifying. And we have a robust study, and we are confident that this project is of value.
Next question comes from Vidyadhar Ginde from ICICI Securities.
So my first question, in case of LPG. In the past, you used to have this some input costs, which were uncompensated, I presume that is now completely done with [indiscernible] also done. So are we able to recover all that and are you making some marketing margins on LPG?
I would not be able to go into that detail on this call. But as mentioned earlier, our marketing margins on LPG also continue to be stable.
Will continue to be stable. Okay. So -- but they are positive. They're not negative.
Definitely.
Yes. Okay. That was the first. And the second 1 is regarding the as far as your -- has been sharing in the press saying that utilization by the end of from 70, 75. Is it because Paradip shutdown? And should we expect that kind of utilization until Paradip restarts?
No, no Paradip -- thing is only for a couple of weeks.
So during that period will you be at that level and then again come back?
No, no. What we mentioned was a long-term, perhaps -- I would not say long term, but for, say, balance of the year. So it was not into Paradip shutdown because that being said.
[Technical Difficulty] but you also apparently said as per to report that by the end of the month, utilization was at 70%, 75% compared to 93% in the beginning of the month. So is that -- so I'm sure at the end of the month, your utilization was lower than 90, which probably due to Paradip.
Paradip, as I said, the Paradip shutdown is only for a couple of weeks. And we -- with the kind of, say, lockdowns, which are happening and the second wave of coronavirus globally coming we have certain applications on the volumes going forward. And though nobody can say for sure what is going to be the consumption levels in India or worldwide. We expect that it may not be, say, back to normal situation, maybe in another 6 to 9 months.
Okay. Any idea you could give us on what were the exit rates on diesel and petrol consumption for July? And I think you gave us the average for the month that -- what was the average exit rate of petrol and diesel consumption in July? So you gave us average for the month that petrol was INR 89 and diesel was INR 77. So by end of month where we worse off [ or the same ]?
I mentioned during my opening remarks, I did mention about gasoline and gas oil sales.
You mentioned about the average for the month. So I wanted to ask you, just that by the end of the month where you worse off or similar, roughly, the consumption was similar for the month?
No, we gave to you -- are you wanting July numbers?
No, no, July, you gave us a number. You said that July the -- I was asking whether end July was similar to average July or it was better or worse? Is the question. And I'm trying to get some idea on August.
Our team will give you this information separately.
Next comes from Pinakin Parekh from JPMorgan.
Sir, my first question is on the retail fuel prices of diesel and petrol. And last time, the company had mentioned that the BS-VI costs are being captured. So at this point of time, sir, given where retail prices are and retail fuel margins are. Are the entire BS-VI related costs being already been captured? Or in your view, we need to see further hikes in prices to capture whatever the IRR that the company was working on the BS-VI investments?
This was confirmed during the last con call also, and we reiterate that whatever was expected has already been built in.
And sir, my second question is that when we just move to the CapEx number, and maybe I missed it, you have mentioned it earlier. What would be the stand-alone CapEx in IOCL excluding the group companies and given the restrictions that you have? Sir, what do you expect to incur this year if the restrictions are not lifted on especially international travel, in exports not coming through?
So out of total, about INR 26,000 crore, about INR 5,000 crores is for group company. So rest is INR 21,000 crore for standalone IOCL, and we want to complete this CapEx because there is no point in deferring CapEx on a scheme, which is already approved by Board with due diligence. So we will be sort of reducing its return if we defer it. So we are -- we want all these schemes to be taken up on priority and spend with the entire 21,000 CapEx, which is planned for the current year. And to what extent we will be able to do that given the circumstances of COVID-related problems and the availability of workforce and work fronts? That is to be seen, but we are trying our best to complete this, to spend this entire amount in the current years.
Next question comes from Manikantha Garre from Axis Capital.
So I wanted to confirm what was the inventory level of crude that you have mentioned as on June end? [Technical Difficulty] Just wanting the amount of inventory crude, inventory you had as on June 30, 2020?
You are wanting volume or what? Quantity you want?
Yes, quantity.
It was about 8 million tonnes.
Okay. But what was the number that you mentioned with respect to 16 million to 17 million tonnes of inventory? Was that -- that is including product also it?
That is what I'm saying. I'm giving you the breakup of crude. Our total inventory, total hydrocarbon inventory consists of crude products and intermediated costs, out of which I've given you the crude number.
Sir, my second question is similar to the last con call, you have mentioned that the cut-off date for calculating the NRE in the quarter, is a large entry. What is the part of this for this quarter for Q1?
It is 15th of July.
Thank you so much, so that would be the last question for the day. Now I hand over the floor to Mr. Bhavin Gandhi for closing comments.
Thank you, Bharthi. I would like to thank the participants and the management for providing us the opportunity to host the call for them. Thank you so much, sir.
Thank you.
Thank you for participating in the call.
Thank you, sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using this conference call service. You may disconnect your lines now. Thank you, and have a pleasant evening.